Mumbai, 6 Feb (Commoditiescontrol): Asian shares edged up on Tuesday thanks to a bounce in battered Chinese markets, although investors were cautious after a slide on Wall Street amid diminishing expectations of a near-term Federal Reserve rate cut, which in turn underpinned the dollar.
Oil prices held largely steady as traders took stock of a visit to the Middle East by U.S. Secretary of State Antony Blinken to discuss a ceasefire offer in the region.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3%, after a 0.7% decline from the previous session.
Chinese stocks, which had initially opened lower on Tuesday, later reversed course, helped by recent signs of support from state-backed investors and as authorities have stepped in to stem heavy losses in the market.
The blue-chip CSI300 Index was last more than 1.5% higher, while Shanghai Composite Index gained 0.3%, after having plumbed a five-year low on Monday. .SS The China Securities Regulatory Commission (CSRC) said on Monday that it would tighten scrutiny of margin financing, malicious short selling and seek to ward off risks involving pledged shares. Hong Kong's Hang Seng Index rose 1.7%.
Elsewhere, Australia's S&P/ASX 200 index stumbled 0.76% ahead of a rate decision by the country's central bank later in the day, while Japan's Nikkei slid 0.72%.
Data on Monday showed the U.S. services sector growth picked up in January as new orders increased and employment rebounded, adding to growing doubts about the slew of Fed rate cuts priced in for this year, which had already been dialled back in the wake of Friday's blockbuster U.S. jobs report.
That kept the dollar propped close to more than a two-month high against the euro and the yen.
The single currency last bought $1.0746, while the yen stood at 148.54 per dollar.
The Reserve Bank of Australia's (RBA) policy decision takes centre stage in Asian hours, where expectations are for the central bank to keep rates on hold.
Still, Fed expectations remained the main driver of market moves as investors come to terms with the likelihood of U.S. rates staying higher for longer than initially expected.
That kept U.S. Treasury yields elevated, with the two-year yield , which typically reflects near-term interest rate expectations, hovering near Monday's one-month high. It was last at 4.4471%. US/ The benchmark 10-year yield steadied at 4.1347%.
Market pricing shows roughly 115 basis points of easing by the Fed this year, down from over 150 bps at the end of last year.
Bets for a March rate cut have also largely been priced out, and investors have lengthened the odds for one in May.
In commodities, oil prices pared some gains from the previous session, with U.S. crude last down four cents to $72.74 a barrel. Brent futures lost three cents to $77.96. Gold rose 0.15% to $2,027.80 an ounce.
(By Commoditiescontrol Bureau: 09820130172)
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